DiamondRock Hospitality Q2 2025 Earnings Call Transcript Highlights

DiamondRock Hospitality Company (DRH) reported Q2 2025 earnings, with CEO Jeff Donnelly, CFO Briony Quinn, and President Justin Leonard participating in the earnings call. The company's financial performance was not specified in the provided transcript. The call was moderated by an operator, and participants included analysts from various firms. The call was recorded, and the company reminded listeners that some comments were forward-looking statements that could be subject to risks and uncertainties.

DiamondRock Hospitality Company (DRH) held its Q2 2025 earnings call on July 2, 2025, with CEO Jeff Donnelly, CFO Briony Quinn, and President Justin Leonard participating. The call was moderated by an operator and included analysts from various firms. Key financial performance indicators and strategic initiatives were discussed, with forward-looking statements included.

Key Financial Highlights
- Revenue: DRH reported revenue of $305.72 million for the quarter ended June 30, 2025, down 1.2% from the same period last year. This compares to the Zacks Consensus Estimate of $308.63 million, representing a surprise of -0.94% [2].
- EPS: The company reported EPS of $0.35, compared to $0.10 in the year-ago quarter. This represents a +6.06% surprise, with the consensus EPS estimate being $0.33 [2].
- Net Earnings: Net earnings per share (diluted) were $0.18, compared to the average analyst estimate of $0.19 [2].
- Revenue Components: Revenue from other sources increased by 3.5%, from food and beverage by 0.9%, and from rooms declined by 2.6% [2].

Strategic Initiatives and Outlook
- Asset Recycling: CEO Donnelly highlighted the company's focus on recycling out of low free cash flow yield hotels into higher-yielding investments and capitalizing on opportunities to dispose of assets where buyers see greater value than the company does.
- Share Repurchases: DRH repurchased just under 1.7 million common shares at an average price of $7.46 during the quarter, with 3.6 million shares repurchased year-to-date for $27.3 million [3].
- Cliffs at L'Auberge Project: The Cliffs at L'Auberge project in Sedona is expected to drive a 25 to 50 basis point tailwind to RevPAR growth in 2026, with wedding revenues at the Cliffs projected to more than double over the full year 2024 [3].
- RevPAR Growth: The company is maintaining its full year outlook for RevPAR growth of negative 1% to plus 1%. Total RevPAR growth is now expected to outperform RevPAR growth by 50 basis points in 2025 [3].
- Corporate Adjusted EBITDA and FFO: Corporate adjusted EBITDA for 2025 is guided at $275 million to $295 million, with FFO per share guidance for 2025 at $0.96 to $1.06 [3].

Analyst and Market Reactions
- Analyst Ratings: The current average analyst rating on the shares is "buy," with 4 "strong buy" or "buy," 8 "hold," and no "sell" or "strong sell" recommendations. The average consensus recommendation for the specialized REITs peer group is also "buy" [1].
- Price Targets: Wall Street's median 12-month price target for DRH is $9.00, about 14.6% above its last closing price of $7.69 [1].

References
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_L8N3U00FI:0-diamondrock-hospitality-co-reports-results-for-the-quarter-ended-june-30-earnings-summary/
[2] https://www.nasdaq.com/articles/compared-estimates-diamondrock-hospitality-drh-q2-earnings-look-key-metrics
[3] https://seekingalpha.com/news/4482849-diamondrock-hospitality-maintains-2025-revpar-growth-range-of-minus-1-percent-to-plus-1